diff --git a/ethereumj-core/src/main/java/org/ethereum/core/Wallet.java b/ethereumj-core/src/main/java/org/ethereum/core/Wallet.java
index 71fac7ac..cf36b311 100644
--- a/ethereumj-core/src/main/java/org/ethereum/core/Wallet.java
+++ b/ethereumj-core/src/main/java/org/ethereum/core/Wallet.java
@@ -97,12 +97,15 @@ public class Wallet {
 
         for (Transaction tx : transactions){
 
+
             byte[] senderAddress = tx.sender();
             AddressState senderState =  rows.get(Hex.toHexString(senderAddress));
             if (senderState != null){
                 BigInteger value = new BigInteger(tx.getValue());
 
                 senderState.addToBalance(value.negate());
+
+                senderState.incrementTheNonce();
                 walletUpdated = true;
             }
 
diff --git a/ethereumj-core/src/main/java/org/ethereum/gui/PayOutDialog.java b/ethereumj-core/src/main/java/org/ethereum/gui/PayOutDialog.java
index 26ec7f23..b7ac22b0 100644
--- a/ethereumj-core/src/main/java/org/ethereum/gui/PayOutDialog.java
+++ b/ethereumj-core/src/main/java/org/ethereum/gui/PayOutDialog.java
@@ -69,7 +69,7 @@ class PayOutDialog extends JDialog {
                         BigInteger value = new BigInteger(amountInput.getText());
                         byte[] address = Hex.decode(receiverInput.getText());
 
-                        byte[] senderPrivKey = HashUtil.sha3(addressState.getEcKey().getPrivKeyBytes());
+                        byte[] senderPrivKey = addressState.getEcKey().getPrivKeyBytes();
 
                         byte[] nonce =    addressState.getNonce() == BigInteger.ZERO ?
                                                      null : addressState.getNonce().toByteArray();
@@ -88,7 +88,6 @@ class PayOutDialog extends JDialog {
                         }
 
                         peer.sendTransaction(tx);
-                        addressState.incrementTheNonce();
                     }
                 }
         );
diff --git a/ethereumj-core/src/main/java/org/ethereum/util/RLP.java b/ethereumj-core/src/main/java/org/ethereum/util/RLP.java
index 985cdc82..d0c37148 100644
--- a/ethereumj-core/src/main/java/org/ethereum/util/RLP.java
+++ b/ethereumj-core/src/main/java/org/ethereum/util/RLP.java
@@ -788,8 +788,12 @@ public class RLP {
 
     public static byte[] encodeElement(byte[] srcData) {
 
-        if (srcData == null){
-        	return new byte[] { (byte) 0x80 };
+        if (srcData == null) {
+            return new byte[]{(byte) 0x80};
+        } if (srcData.length == 1 && srcData[0] < 0x80) {
+
+            return srcData;
+
         } else if (srcData.length <= 0x37) {
             // length = 8X
             byte length = (byte) (OFFSET_SHORT_ITEM + srcData.length);